The Biblical Story of the First Bank Run

The Run on Pharaohs Bank by Lance Wallnau
Detail from Joseph Overseer of the Pharoahs Granaries, by Sir Lawrence Alma-Tadema (1874) oil on canvas via Wikimedia Commons

By Lance Wallnau, for Birch Gold Group

Recently I was rereading the story of Joseph – remember, he led the Israelites out of Canaan during a famine and settled, with the Egyptian pharoah’s permission, in the land of Goshen.

Now, of course I’m familiar with the story. What I hadn’t remembered, that struck me this time, was there was some kind of monetary crisis going on. Here, let me show you:

Genesis 47:15 (KJV):

And when money failed in the land of Egypt, and in the land of Canaan, all the Egyptians came unto Joseph, and said, Give us bread: for why should we die in thy presence? for the money faileth.

“Money failed” in Egypt. What exactly does that mean? I decided to find out.

Before I started digging, I expected this to be one of those stories of currency debasement – the kind we’ve seen, over and over, throughout history. I thought Pharaoh had tried old-fashioned “quantitative easing” by making smaller coins, or diluting their precious metal content with base metal.

I was totally wrong. The real story is a lot more interesting than that..

Bread and beer as money

The Egyptian Middle Kingdom period had the idea of money, but not as we’d recognize it today. Workers were paid in bread and beer. Why beer? It wasn’t a luxury – it was about the safest thing to drink. Egyptian beer was much less alcoholic, and higher in calories, than modern beer.

Egyptians had standardized the size and shape of pans for bread-baking, and beer came in uniform jars. They knew how much grain it took to make a loaf of bread or a jar of beer – and this became their unit of monetary measurement, pefes or “baking value,” probably equivalent to about one pound of wheat.

Unskilled workers, day laborers and the like received their pay fresh out of the oven. They didn’t make much more than a subsistence wage. Obviously, if they didn’t work, they didn’t eat.

Skilled artisans might earn anywhere from twice to fifty times as much as a laborer. Imagine trying to collect 65 loaves of bread (not to mention 50 jugs of Old Memphis Light) at the end of the day! Unless you’re feeding the whole neighborhood, it’s just not practical to lug a cart of bread and beer home every day. Where would you store it? How would you keep the bread from going moldy?

The solution is pretty simple… Since a loaf of bread and a jar of beer each have a standard “baking value,” instead of withdrawing the food they didn’t need, middle-class Egyptians left their extra pefes on deposit in Pharoah’s grain banks. In exchange, they got a papyrus receipt.

And since nearly everyone kept their extra grain at the grain bank, they used their receipts for trade and barter (way easier than handling the grain directly).

That’s right – ancient Egypt invented their own version of both paper money and central banking.

And if there’s one thing we know about paper money, it’s only as good as whatever backs it.

A run on Pharaoh’s grain bank

Remember, famine in Canaan drove Joseph and the Israelites to relocate. The famine followed them.

Genesis 47, 13-14 (KJV):

And there was no bread in all the land; for the famine was very sore, so that the land of Egypt and all the land of Canaan fainted by reason of the famine. And Joseph gathered up all the money that was found in the land of Egypt, and in the land of Canaan, for the corn which they bought…

This next part includes some speculation, but I think it’s well-founded. Sounds to me like Joseph, being both wise and having recently experienced famine, saw what was coming. He “gathered up” all the paper money he could and took it to the grain bank and cashed out “the corn which they bought.” (Note: In historic context, “corn” is a non-specific word that refers to any sort of grain.)

We know what happens next – the Egyptians come to Joseph and beg for food because, they explain, “the money faileth.”

The grain banks were empty. One day, the people of Egypt woke up and discovered all their papyrus receipts, all their paper money was backed by nothing! An empty silo! Pharaoh’s broken “promise to pay” wouldn’t fill their bellies. Even worse, once word got around the grain banks were empty, no merchants would accept their paper money. Overnight, all their savings vanished. They were left with nothing but a handful of paper.

No wonder they told Joseph “the money faileth” – the money failed when they most needed it.

The lesson of Joseph

Now, there are a ton of things we can learn from Joseph. Today, I want to point out just two specific lessons:

  1. When Joseph saw trouble coming, he took action. He didn’t hide his head in the sand. He didn’t panic, or waste time in argument or debate. Instead, he did what was necessary to make absolutely sure he and his people would be okay.
  2. When the starving Egyptians came begging, Joseph fed them – but he made them pay for it. By the end of the famine, Joseph not only owned all the Egyptians’ livestock, he had them working as sharecroppers on the farms they once owned (Genesis 47:16-27).

In other words: in his wisdom, Joseph was able to turn a crisis into an opportunity – and created massive wealth at the same time.

I sincerely believe every person of faith must be prepared to do the same. I don’t mean stockpiling bread and beer. I mean:

  • Looking at reality
  • Anticipating likely outcomes
  • Acting decisively
  • Taking care of your tribe
  • Taking care of others

Joseph had faith in his God and himself. The Egyptians had faith in Pharaoh’s grain banks instead.

Joseph’s faith and obedience saved the nation. The Egyptians lost everything.

Ask yourself: where’s your faith? Where would you be if your paper money became worthless tomorrow – if “the money faileth”? Would you be positioned to safeguard yourself and your loved ones?

Would you be Joseph, or would you be the begging Egyptians?

2023, bank run, Featured, lance wallnau